- Opened positions on Gold remain slightly bullish (54% long / 46% short)
- The closest resistance for the yellow metal is currently located at 1,193
- At the same time, the closest support for the bullion is placed at 1,177
- Upcoming events on June 4: US Unemployment Claims (May 30), France Unemployment (Q1), Australia Trade Balance (Apr), Bank of England Interest Rate Decision and Asset Purchase Facility, Canada Ivey PMI (May)
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Gold traded below $1,200 an ounce on Wednesday even as the US Dollar weakened amid expectations of a Greek debt deal. Investors' sentiment remained bearish due to outflows from gold-backed funds. Holdings in SPDR Gold Trust, the world's biggest gold ETF, declined 4.18 tonnes to 709.89 tonnes on Tuesday, hitting the lowest level since January.
Meanwhile, Australia's gross domestic product grew more than expected in the first quarter, as a pick-up in mining export volumes, household spending and retail stock managed to offset sluggish investment. The Australian economy expanded at a robust 0.9% pace in the three months through March, justifying the Reserve Bank of Australia's decision to keep interest rates on hold. The quarterly growth figure compares with 0.5% in the last quarter of 2014. Economists, however, had expected a 0.7% gain. Measured on an annual basis, growth came in at 2.3%, compared with 2.5% in the December quarter.
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BoE interest rates to stay flat after June 4 MPC meeting
The Bank of England's Monetary Policy Committee will make an interest rate decision on Thursday. Currently, no changes are forecasted to take place and the UK monetary policy regulator is likely to make a first move later this year or in 2016. Meanwhile, Canadian Ivey PMI data is due at 2:00 PM GMT. The indicator, which shows composite activity changes for all sectors of the country's economy, is estimated to decrease significantly in May, down from 58.2 to 55 points.Read More: Fundamental Analysis
XAU/USD develops inside bearish wedge pattern on daily chart
Since the second quarter of 2013, the bullion has been developing inside the falling wedge pattern, meaning that trading range is decreasing as time goes on. Two pattern's boundaries are represented by the upper trend-line around 1,270 and pattern's support at 1,120. Among recent developments, in March 2015 the yellow metal resumed gaining value, even without touching the lower trend-line. In the foreseeable future gains are likely to be limited and the bullion should be driven by the 200-day SMA around 1,220 with a slight bearish bias. Some short-term gains in the direction of the long-term downtrend (1,270) are not completely off the table, but bears are eventually going to overtake a lead and drive the metal back to the south. The overall negative tendency for Gold seems to be the case in the long run, while at the end of this year the precious metal should to consolidate around 1,150, in case the present trend persists.Daily chart
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For the first time in five days the precious metal registered a more pronounced daily move, while appreciating above the 1,190 mark. The bullion is now approaching the weekly pivot point at 1,193. However, a breach of this resistance does not guarantee any further gains, specifically taking into consideration a dense supply area at 1,197 (monthly PP, 55-day SMA and 20-day SMA). XAU/USD requires a close above this mark to affirm the medium-term bullish expectations.
Hourly chart
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SWFX opened positions on gold are positive, bullish-bearish gap narrows
However, OANDA's bulls are in the safe majority with 70.95% of all current positions. Gold's sentiment at OANDA is the second most positive among all major currency pairs at the moment. Saxo Bank market participants are also optimistic with respect to the precious metal, as there were 63% of bullish trades registered by 5:30 AM GMT on June 3.
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between May 3 and June 3 expect, on average, to see Gold trading around 1,220 by the end of September. At the same time, 55% of them believe the bullion will be even strongly above 1,200 in three months, while 31% of traders surveyed forecast the bullion to trade in the range between 1,050 and 1,200.
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